What companies can do to overcome the burgeoning issue of relocation within China

When I was still at school, I recall my elder sister discussing with her university mate his impending move to a remote island based in the North Pacific. I didn't know where it was then, nor have I heard of it before or after that one conversation.

Despite being a person of integrity and a man whom I hold in great esteem, his response to my sister was: "Janie, I'm relocating there for one thing - the money." They offered him five times his salary.

Today, companies in China are focused on third- and fourth-tier cities where there has been an infusion of new wealth predominantly through manufacturing, and industries such as mining. Testament to this is the number of luxury brands with whom we are actively recruiting for locations such as Chengdu, capital of Sichuan province.

Let's face it: with more than 300 million people living across China's smaller cities, roughly equal to the 310 million population of the United States, these combined areas become an attractive customer base for many companies, as well as a potentially untapped talent pool for some industries. Growth is occurring at a faster rate today in the third- and fourth-tier cities than in the first-tier right now, and where there is growth, and investment, come opportunities.

The Chinese government is attempting to distribute its fortunes more evenly, offering incentives for both Chinese and foreign businesses to set up farther inland, but regardless of which city a firm wants to expand into, there still lies the issue of having the workforce in place to build, drive and sustain the local business.

One suggestion for companies is to focus on attracting "returnees" - at Antal, we use a system which is searchable based on the birthplace of candidates. This has assisted in identifying potential candidates who have already done a "stint" in the big city and could be open to a position back in the hometown. I guess what I am thinking about is: what it would take me to leave Beijing and move to any of the smaller locations?

Honestly? Money would play a large factor, because I would be asking myself the question that many executives we deal with on a daily basis do - what benefit would I get out of moving to a remote place where there's poverty, farmland and a lack of basic services, and where hospitals and schools are backward in comparison. Would my Internet connection allow me to Skype my mum and dad each week?

That's combined with the thought of not being able to shop in a store with at least some Western goods - the irony being that I could probably still pop into Gucci to purchase some new arm-candy.

An underlying trait that any person going to relocate inland must have is a sense of adventure, an open mind; they need to be able to deal with situations that are completely out of their control, and in most situations, their understanding, and forge ahead.

To relocate you have to have the confidence in your survival techniques, on both a business and personal level. Many of my colleagues in other international recruiting firms are in agreement that China is one of the hardest places for expats to succeed - the main reason is the lack of cultural fit.

It would be absurd, in my opinion, to place an expat into a third- or fourth-tier city without them having already dipped their toes into this exhilarating yet equally frustrating country. Within four months of my relocation to Shanghai from London, 80 percent of the office staff had resigned - cultural differences definitely - and the impact this had on me was immense; despite having been in the international recruitment business for 12 years I felt that I had failed.

Fortunately my CEO had picked the right person to grow the brand, as over the following months the Shanghai business grew to almost three times the size, and all with local Chinese. Selecting the right person for the job is paramount - and companies need to look hard and fast at the people they are thinking about relocating, and to look at not just their ability to do the job, get it done, but also the impact such a move would have on them being able to do the job assigned to them.

Costs for expats are already much higher than on face value - having an employee in China can be up to three times their base salary, so companies just cannot afford to make a mistake.

Even relocating local Chinese has rocketed; one senior consultant from our automotive division remarked that relocation is a massive problem for many candidates in comparison to two years ago. As many car manufacturers have set up offices and plants across second- and third-tier cities, they begin to open up more job opportunities for locals.

However even though they are offering more money, and better job titles, they soon miss their home, and leave after a year or less. It is of course easier for the better known, more established brands to attract the more sought-after candidates; however, no company logo will quash anyone's desire to be with their loved ones.

As for those newcomers to the China market, many are now just realizing the labor costs are indeed much higher than anticipated, we all too often deal with companies which are just not prepared to pay the price, and thus lose out on experienced executives.

There is no overnight solution; however, the starting point for any company is to choose the right location not just on transportation and logistics, but with strong consideration to the workforce, ask yourselves the question would you live here?

Secondly make sure that the elite team you have chosen is well briefed on what to expect - if you want them to sign a long-term contract (three years plus) you need to be honest with them up-front. You need to provide them with up to date information about living in these cities, including all important life issues, such as healthcare, education, and crime.

Managing expectations is a key element; they will respect you for it. Training is most definitely in our top three - especially for expats.

Companies must provide an insight into the Chinese culture, and the importance of history and culture in social and business environments. Once they are on board, the ongoing advice, support, and guidance that you give your staff will ensure your company's success and continued growth after all it's the people that make a business. As for money, well offering three or four times someone's salary to "relocate" them elsewhere does sound good but in reality is that method of attraction sustainable?

The author is head of operations for Asia, Antal International, China, a recruitment firm. The views do not necessarily reflect those of China Daily.